Why heads of HR now look at temp to perm

A while ago, I had a meeting with the Head of HR in a FTSE250 e-commerce business. The type of business that is still young but has grown rapidly. Young enough and in the right sector to have kept a ‘non-corporate’ culture and – to some extent – structure. She was the 1st person to ask me (without any prompting) about a trend we’ve been noticing. I probably would have brought it up anyway but it was interesting that it was already in her mind too.

The question was whether the calibre of people in the freelance market is rising. And whether they are missing a trick in not actively seeking to attract more ‘non-permanent’ resource. The simple answer is ‘yes’. The implication is important: companies don’t have to create permanent roles in order to attract great talent.

But there are very important implications which lead on from that:

1. You can hire far faster

So in a rapidly growing business, the hiring process isn’t slowing growth. Freelancers don’t have notice periods. If they are free, they can start on Monday. They are also very responsive to opportunities as they need to land new work to pay their bills. So applications come within hours rather than weeks.

2. You can hire with less due diligence

Don’t get me wrong, I’m not suggesting you hire poor talent. It’s simply that if your contractual arrangement with someone is not as a permanent employee, it is easy to end the contract if things aren’t working out. And you focus more on whether the freelancer has the right skills to get the job done and less on whether they, for example, are going to be a great cultural fit or have the potential to be a future leader of the company. And that’s how the freelancer sees it too (remember all those permanent candidates who you haven’t managed to get over the line). Simply, there are fewer barriers to hiring.

3. You can try before you buy

It’s well documented that interviews are a poor way of determining high performance. Having someone work in the company for a few months is a great method. Consider how law firms hire graduates. They get them in to do summer vacation schemes. And hire the best performers straight after. The same is true of taking a freelancer permanent – and we’re seeing this more and more too.

4. You can use a freelancer for the time it takes to hire a permanent team member

Not all freelancers want to go permanent. But consider how long a hiring process takes. And then add on the time to get the offer accepted and the notice period completed. 4.5 or even 6+ months. If the role is mission critical, you could have someone doing it the whole time.

This is what we talk about in our meeting. It’s a great, forward-thinking conversation and I hope you find the implications interesting too.